Nestl is investing more heavily than ever before in one of its most vital business segments in Latin America. The Swiss giant has made an announcement to invest R$2 billion into its nutrition and health business in Brazil over a 3-year period up to 2028, displaying its unwavering confidence in the country’s long-term prospects for specialized food products. It represents around 30 percent of Nestl’s total R$7 billion investment in Brazil, anticipated from 2025 to 2028, and confirms that nutrition and health is, alongside coffee, milk products and confectionery, one of only four overarching global strategic priorities.
Leading the project is a new infant formula plant based in Ituiutaba, in Minas Gerais. Announced in October 2017 by the company, this new industrial facility will cost R$600 million to build and will be located alongside a nestl dairy plant, already the biggest milk processor in Latin America. Scheduled to start construction in 2027 and commercial operation in 2028, the new plant will have the capacity of 40,000 tonnes/year.
The initial line-up of products will include Nestogeno Nestonutri Ninho 1+ and Ninho 3+ brands. He concurs with the company’s decision as being both practical and strategic. ‘Having the new line adjacent to the existing dairy site allows the sharing of electricity, steam and water services avoiding the need and the higher cost of investing in a new, completely isolated site. During building the plant there should be roughly 700 temporary jobs created and 100 post construction jobs created; things with impact more on the local economy of Ituiutaba and the lown of Minas Gerais. So far, part of Brazil’s demand for powder milk has been satisfied with imports, mostly from Chile.
This will now be changed by the new factory. Melchior was frank in saying that the initial aim is to strengthen the local market: “we have been limited by the production capabilities so far” said he, “now we can look to the opposite”. On top of the Minas Gerais project, Nestl intends to increase capacity at its Araatuba, So Paulo state, operation.
That facility already manufactures a large number of nutrition and health care products and is one of the company’s most profitable manufacturing plants in Brazil. Further investment will upgrade machinery and boost production of life-stage-specific formulasfrom early childhood to health in more mature years. A focus on nutrition and health is indicative of more serious changes taking place in the behavior of Brazilian consumers.
Families are considering the overall health value of packaged-food products and scrutinizing scientific information of claims of benefit, at the premium end of the scale, individuals are approaching aging with much more reflective attitudes and are looking for nutritional solutions to tackle age-related problems. Feasting on the most attractive slots, Nestl considers these commodities of more pricing power and profitability than many traditional segments. The Brazilian push from Nestl global fits precisely into this consistent pattern.
Nutrition and health has always been identified as one of the group’s core growth engines and a range of ‘priority territories’. The size of the commitment in Brazil highlights the importance of the country in the group’s emerging-markets portfolio.
